POKU v. GHANA COMMERCIAL BANK
1989
COURT OF APPEAL
GHANA
CORAM
- AMPIAH
- LAMPTEY
- ESSIEM JJ.A
Areas of Law
- Contract Law
- Property and Real Estate Law
- Banking and Finance Law
1989
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
Ampiah JA, writing for the appellate court, reviewed a mortgage dispute arising from a 1957 loan of £1,500 advanced by the first defendant-bank and secured on the plaintiff’s house at No. 40, Block 12, M.E. Extension, Kumasi. After default, the bank sold the property by auction and the second defendant purchased it. The plaintiff sued to set the sale aside and seek reconveyance, relying on non-service of a demand notice. The trial judge found non-payment and improper service, but, invoking clause 4(5) of the mortgage deed (a purchaser’s protection clause), held the sale valid and confined the plaintiff to damages against the bank. On appeal, the court affirmed the contractual clause, Coote’s Law of Mortgages, and local authorities (Marfo v. Edusei; Akyeampong v. Atakora), refused to disturb supported findings of fact, and dismissed the appeal. Lamptey JA and Essiem JA concurred.
In 1957 the plaintiff had obtained a loan of £1,500 from the first defendant-bank and secured the loan with his house No. 40, Block 12, M.E. Extension, Kumasi. The plaintiff had failed to repay the loan, whereupon the first defendant-bank had had the security sold by auction in terms of the mortgage deed. The second defendant had bought the house. The plaintiff then took this action to have the sale declared null and void, to set aside the sale and have the house reconveyed to him. Both parties relied on the mortgage deed, exhibit A. The learned trial judge at the end of the case found that there was a breach of the loan agreement for non-payment of the loan and that there was no proper service of the demand notice for the failure to pay back the loan. He held therefore that the sale was in breach of the terms of the agreement. He proceeded then to deliver himself of his judgment thus:
"On the basis of the above authorities, I ought to hold that the failure of the first defendant to give demand notice to the plaintiff was a mere irregularity and therefore the sale of the property cannot be set aside. The second defendant therefore acquired a valid title. The proper remedy of the plaintiff lies in damages against the first defendant . . ."
He then stated what in law the plaintiff was entitled to by way of damages. But finding no evidence to support the value of the house at the time of sale, he deferred the assessment of the damages together with the costs. It is against this, that the plaintiff has appealed to this court.
The substance of the plaintiff's submission in this appeal is that the learned trial judge having found that there was a breach in the mortgage deed for non-service of the demand notice he should have declared the sale null and void and set it aside accordingly; thus restoring to the plaintiff his said house. In coming to his conclusion, the learned trial judge had relied on clause 4 (5) of the mortgage deed, exhibit A, which the parties by their own conduct had agreed should be binding on them. This clause provides:
"That no purchaser . . . under the powers herein before contained shall be bound or concerned to see or require whether any such default has been made or otherwise as to the propriety of such sale or be affected by notice that no such default has been made or that the sale is otherwise unnecessary or improper and notwithstanding any impropriety or irregularity whatsoever in any such sale . . . the sale shall as regards th